For us, it's about doing great products. When look at netbook, cramped keyboard, terrible software, junky hardware, very small screens, just not a consumer experience. Not something that we would put the Mac brand on, quite frankly. It's not a space, as it exists today, that we're interested in or that customers will be interested in long term. But do look at the space and see how customers respond to it. People who want a small computer that does browsing and email might want to buy an iPod touch or an iPhone.

If we find a way that we can deliver an innovative product that really makes a contribution, then we will do that. We have some interesting ideas in this space. Product pipeline is fantastic for Mac. 17 out of last 18 quarters, have exceeded market rate of growth. Quite an accomplishment in this quarter, especially when compared to very low-priced netbooks "that I think it's a stretch to call them a personal computer" which are propping up industry.

OK, what's the take home message here? Allow me to translate it from Applespeak for you.

Netbooks have small screens and cramped keyboards, which we don't like.

We won't make netbooks, we're filling that space with the iPhone and the iPod touch.

We will attack that segment with something else too (unless Steve cancels it).

Netbooks aren't personal computers.

Okay, numbers two and three are easy. (Why am I so sure about three? Well, I think Tim Cook goes the closest possible here to announcing future products without actually doing so. Compare this to how Peter Oppenheimer confirmed the iPhone one year before its launch by saying as little as "we're not sitting around doing nothing.")

But how about one and four? I think the real hidden messages are buried in those two.

So netbooks have small screens and cramped keyboards. Of course: that's how big they are! Obviously, a 14" netbook wouldn't be much of a netbook now, would it?

So how to make a netbook-like device that doesn't have a small screen or a cramped keyboard, while keeping it small?

Easy. By making it an oversized iPhone. An Apple tablet. The whole thing will be a screen, and a touchscreen at that, with the possibility of showing on-screen keyboards.

And finally, what about the "not a personal computer" comment?

It's obviously bullshit, for one. Why wouldn't a device with PC hardware (matching the capabilities of a top laptop from a few years back), running a full-blown PC operating system, be a personal computer?

Commenting the earnings call, Jason Snell sees it this way:

Boom! Tim Cook destroys the Netbook world again. "I think it's a stretch to call it a personal computer." Ouch. They've said much of this before, but it's very clear that Apple wants us to know that they're looking at this category and have some ideas... just nothing to announce today.

Well, I beg to differ. Not about the fact that Apple has some ideas, no. But I don't think Tim's comments were meant to belittle the netbook sector. No, I think what he's trying to say is something like this:

What we're going to release in that sector won't be a Mac, it won't be a real personal computer. And I know people will whine about that, comparing our product to netbooks, which are PCs. However, if we keep repeating that netbooks aren't PCs, it might actually start looking true, so people will stop whining.

So there you have it. A tablet device is coming, and it won't be a Mac. It couldn't be: if it were, people would start running all sorts of Mac software on it, and most of it would run very poorly on such an underpowered little thing.

So it will be something based on the iPhone OS. Hopefully, with enhanced functionality, though. Multiple apps, a true file system, saving documents, menus, windows, and so on... The possibilities (and the questions) are legion.